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TRANSCRIPT
TROPER LAUNNA 8102
TNUOCCA DNA
FOR THE YEAR ENDED 31 DECEMBER 2018
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NOTICE IS HEREBY GIVEN that the 26th Annual General Meeting of Trans-Nationwide Express PLC will be held at Airport Hotel, Obafemi Awolowo Way, Ikeja, Lagos on Thursday, 11th July, 2019 at 11.00 a.m. for the following purposes:
ORDINARY BUSINESS:
1. To lay before the meeting the Audited Financial Statements for the year ended 31st December, 2018 together with the Reports of the Directors, the Auditors and the Audit Committee thereon.
2. To elect/re-elect Directors.
3. To authorise the Directors to x the remuneration of the Auditors.
4. To elect members of the Audit Committee.
SPECIAL BUSINESS
5. To x the remuneration of the Directors.
BY ORDER OF THE BOARD
CAUTIOUS SERVICES LIMITED(SECRETARIES)FRC/2013/ICSAN/00000002873
Date: March 22, 2019Plot 28, Oshodi Apapa Expressway,Oshodi, Lagos.
PROXY:
A member of the Company who is entitled to attend and vote at this meeting may appoint a proxy to attend and vote instead of him. A proxy need not be a member of the Company. A form of proxy is enclosed.
All proxy forms must be completed, duly stamped at the Stamp Duties Ofce and deposited with the Registrars, Cardinalstone Registrars Limited, 358 Herbert Macaulay Way, Yaba, Lagos note later than 48 hours before the time of holding the meeting.
E-DIVIDEND:
Notice is hereby given to all shareholders to open bank accounts, stock broking accounts and CSCS accounts for the purpose of dividend. A detachable application form for e-dividend is attached to this Annual Report to enable all shareholders to furnish particulars of their accounts to the Registrars as soon as possible.
CLOSURE OF REGISTRAR OF MEMBERS AND TRANSFER BOOKS:
NOTICE IS HEREBY GIVEN that the Register of Members and Transfer Books of the Company will be closed from Monday, 1st July, 2019 to Friday, 5th July, 2019, both days inclusive for the purpose of updating the Register of Members.
NOMINATIONS FOR THE AUDIT COMMITTEE:
The Audit Committee comprises of 2 (two) shareholders and 2 (two) Directors. In accordance with section 359(5) of the Companies and Allied Matters Act, CAP C20 LFN 2004, any shareholder may nominate another shareholder for appointment as a member of the Audit Committee by giving notice of such nomination in writing to the Company Secretaries at least 21 (twenty-one) days before the date of the Annual General Meeting.
RIGHTS OF SHAREHOLDERS TO ASK QUESTIONS:
Pursuant to Rule 19.12 (c) of the Nigerian Stock Exchange’s Rulebook 2015, please note that Shareholders have a right to ask questions not only at the Annual General Meeting, but also in writing prior to the Annual General Meeting and such questions must be submitted to the Company on or before Friday, 5th July, 2019.
Directors: Dr. Oladiran Fawibe - Chairman Mr. Theodore O. Chikelu - Ag. CEO (w.e.f 12/12/2018) Mrs. Chidinma E. Iheme - Managing Director/CEO (Retired w.e.f 31/12/2018) Mr. Kayode O. Ajakaiye Mrs. Nneka Ikejiani Alhaji Umar B. Jimada Mrs. Oluwatosin Ogbemi Mrs. Aderonke O. Fatade - (Independent director) Mr. Adebayo A. Adeleke - (Appointed w.e.f 11/07/18) Mrs. Daniella F. Suleman - (Appointed w.e.f 11/07/18) Mr. Sulaiman Adedokun - (Appointed w.e.f 11/07/18)
Registered ofce: Plot 28, Oshodi Apapa Expressway. Oshodi, Lagos, Nigeria.
Tel: 08123682573, 09095270137,
08025597917, 07046182356 Email: [email protected]
Secretaries: Cautious Services Limited, Cautious House, 23 Road, G. Close, House 4, Festac Town, Lagos. Tel: 08033052441, 08033372451 Email: [email protected]
Registrars: Cardinal Stone (Registrars) Limited 358, Herbert Macaulay Way, Besides St. Dominic Catholic Church, Yaba, P. O. Box 9117, Lagos.
Registered number: RC. 61750
Auditors: HLB Z.O. Ososanya& Co., (Chartered Accountants), Bank of Agriculture Building, Plot 7, NERDC Road, Ikeja Central Business District, Alausa, Ikeja, P.O. Box 1433, Lagos. Tel: 01-7747861 Email. [email protected]
Bankers: Access Bank Plc. Diamond Bank Plc. Eco Bank Plc. Fidelity Bank Plc. First Bank of Nigeria Plc. First City Monument Bank Ltd. Keystone Bank Ltd. Polaris Bank Ltd.
2018 2017 Change N'000 N'000 %
Revenue 775,055 701,387 11
(Loss)/prot before taxation (38,938) 5,553 (801)
(Loss)/prot after taxation (26,433) 3,611 (832)
Retained earnings 266,221 292,654 (9)
Share capital 234,424 234,424 -
Shareholders' funds 571,906 598,339 (4)
Per share data
Based on ordinary shares of 50k each:- (2018; 468,847,132 shares and 2017; 468,847,132)
Earnings per share (5.6)k 0.8k (800)
Net assets per share 122k 128k (5)st
Share price(at 31 December) 65k 78k (17)
Distinguished Shareholders, Fellow Board Members, representatives of Regulatory Bodies present, esteemed Ladies and Gentlemen. I am delighted to welcome you to the 26th Annual General Meeting of our Company, TRANS-NATIONWIDE Express Plc., to present the Reports and Financial Statements of the year ended December 31, 2018 and a review of the Company's performance during the nancial year.
Before presenting the nancial performance of the company, it is pertinent that I briey summarize the operating environment within which company performed during the period. The business climate and the general state of the economy remained rather unstable and therefore, challenging. The global economy saw moderate growth in 2018, amidst ongoing trade tension. Weaker nancing conditions, softer commodity and energy prices also had an unfavourable impact. Overall, there was a slowdown in growth in advanced economies as well as emerging markets and developing nations.
It would be recalled the Nigerian economy performed poorly in 2016 and 2017 during which Nigeria experienced almost unprecedented recession which was a fall-out from global economic downturn, involving many industrialized countries. The macroeconomic indicators in Nigeria plummeted, and this was exacerbated by slow response to the required strategic adjustments in both monetary and scal policies.
However, the performance of the economy in 2018 was positive, to record modest GDP growth rate resulting from improved performance in key sectors of the economy. The economy would obviously have recorded higher growth rate but for the security challenges in some parts of the country. It is expected that the national economy will sustain the momentum of positive growth and development witnessed in 2018 in the coming years, particularly in the area of infrastructure with positive impact on our industry.
COMPANY PERFORMANCE
In 2018, our company posted a turnover of N775.5 million as against N701.387 million in 2017, and prot before tax of N26.433 million as against N3.611 million during the previous year.
The courier business thrives on high volume of business as the cost to execute the business for ranges of volumes is usually xed. Therefore, the operational cost for range of volumes usually remains unchanged irrespective of the volume. In effect, the higher the volume, the better the bottom line. There was a signicant increase in revenue of 11% when compared to the previous year. This increase was achieved despite the downturn experienced by businesses that retain our services - a fall-out of the general business climate prevailing in the country. The industry also experienced low pricing due to the inux of new entrants with negligible overheads when compared to our company that has to meet mandatory statutory and other obligations. It became a buyer's market and efforts to review tariffs due to high cost of operations were rebuffed by customers.
Your Board had for sometime been considering the need to diversify the company's products and invest on other more protable areas of the logistics business. We are pleased to report that as part of the reinvestment of the funds generated from the Rights Issue, there had been a noticeable progress as can be seen in the slight increase in our turnover for the year. We are very optimistic that in the long run of full application of the funds, and embarking on some proposed businesses currently in the making, the end result will yield positive returns that will boost the benets of all stakeholders of the company. The diversication will not only deepen our existing business offerings but also add new ones hitherto unexplored in terms of engagement with relevant companies and agencies. In this regard, we are making every effort to attract more foreign partners to ensure positive synergies with sustainable returns on investment.
The Board and Management have a strong commitment to explore these new opportunities for revenue expansion, optimise the right resources and provide the supporting work environment to the entire staff to express inherent potentials.
DIVIDEND
Your Board does not recommend a declaration of dividend at this time, as we work for a turn around and expect robust dividends in the near future.
CONCLUSION
As we work assiduously towards the re-positioning of our company, we look forward to an improved future with optimism. We will leverage more strategically on our goodwill as an ethical and socially responsible organization, explore benecial strategic alliances and invest in the requisite resources towards achieving our goals
On behalf of the Board of Directors, I thank you, our esteemed shareholders, for your encouragement, support and co-operation given to the Board and Management. I also thank my colleagues on the Board for their support and commitment. My deep gratitude also goes to our customers, other stakeholders as well as the Management and staff of the company.
Finally, I pray that peace may reign in our country and that God will grant us the grace in our endeavours individually and collectively and to afford our company the opportunity to attain higher levels of success. Thank you and best regards.
Dr. Oladiran Fawibe
Chairman
Dr. Oladiran Fawibe, the Chairman of the company is a 1969 graduate of Economics from the University of Ibadan. He also obtained a Masters and a PhD Degree in Petroleum Economics from the same University in 1971 and 1983. He worked at various times at the Nigerian Institute of Social and Economic Research, University of Ibadan, Central Bank of Nigeria, and Nigerian National Petroleum Corporation where he held senior management positions. He serves as director in the Board of other Companies and is currently involved in several Companies including International Energy Services Ltd, a Consultancy/Oil Service Company.
Mr Theodore O. Chikelu The acting Managing Director and CEO of the company holds a bachelor's degree (BSC) in Geography from the University of Nigeria Nsukka (1987) and a master of Public administration from the same university in 1991 His work experience spanned across the public and private sectors .He worked briey in the civil service National directorate of Employment ,the oil servicing industry and mostly in Aviation and regional commercial expansion/cargo and courier development in over six Nigerian airlines including Bellview airlines ,Aero Contractors of Nigeria and Arik airlines where he rose to the post of Vice President commercial for Africa. A veteran of startup aviation development initiatives in Sub Saharan Africa and an expert in developing emerging and niche markets, Mr. Chikelu was MD/CEO of Jet Afrique Aviation serviced Ltd an aviation support and Charter Company specialized in Cargo development and business travel from 2014 to September 2018. He joined Trans nationwide express PLC in October 2018 as chief Operating Ofcer and assumed the position of Acting MD/CEO by board appointment in December 2018 when the former MD Mrs. Chidinma Iheme retired from the company. He is a member of the institute of Personnel management of Nigeria and the institute of management consultants.
Mr Kayode O. Ajakaiye, a non-executive Director of the Company holds a Bachelor Degree (B.Sc) in Economics from the University of Ibadan (1964). He began his career with National Bank of Nigeria Limited in 1967 where he worked until 1976 before establishing his own business, Peter Harrison & Co., a general commerce rm. He is a Board Member in several other Companies including Neditech (Nigeria) Limited.
Alhaji Umar Bologi Jimada is a non-executive Director of the Company. A 1981 graduate of English from the Ahmadu Bello University Zaria, he held various positions in the Kwara State Governor's ofce from 1982 where he was at different times, the Information Ofcer and the Administrative Ofcer in the Governor's ofce and Cabinet Department respectively.
He also worked at the Kwara State Utility Board from 1989 and rose to the position of Acting General Manager, Administration and Secretary to the Board of Kwara State Water Corporation.He has served in various ad hoc Committees including serving in 1999 as Chairman of a Task Force on the Implementation of Special Local Government projects to rehabilitate broken down rural water projects, schools and cottage hospitals, in Kwara State.
He has been engaged in private business since August 1996 and is currently involved in the running of the Aweba Fertilizer and Chemical Company, as well as the Elite Garage and Automobiles Limited.
Mrs Nneka Ikejiani is a non-executive Director of the Company. An Accountant by profession she has 17 years of combined experience in Project Management, Financial Analysis and Planning. She holds a BSc Degree in Economics from the University of Lagos (1990) and an MBA from the City University Business School, London (1995) specializing in Information Technology and Management. She is a Nigerian Chartered Accountant (ACA), a Certied Public Accountant (CPA) and a Certied Chartered Accountant (ACCA).
She has held various senior positions in companies within and outside the country including Schroders Unit Trusts, London, England (Senior Accountant), Securiplan Plc, London, England (Management Accountant), Integral Solutions, Nigeria and Microsoft, Anglophone West Africa.She also serves as a director in the Board of other companies in Nigeria and is a member of Trinity Foundation, a foundation overseeing 10 NGOs in Nigeria, as well as WIMBIZ (Women in Business).
Mrs. Oluwatosin A. Ogbemi is a Non-executive Director of the company. She is a Business Statistics expert, Investment Analyst and Business Development Professional. She graduated from the University of Lagos in 2007 with a BSc (Hon) in Actuary Science. Between 2010 and 2011 she attended various programmes in the areas of Business Administration and Brand Management in the United Kingdom.
She has variously worked in LASACO Assurance Plc. and Mutual Alliance, Investment & Securities Ltd., She also worked in Tom Bee Investment Limited between 2010 and 2012 as a Business Development/Brand Manager. She currently works at Olakunle Soriyan Company where she heads the Programmes Unit of the Brainbox Group as the Responsibility Executive.
Mrs. Aderonke Fatade is an Independent Director. She is a 1979 Graduate of Agricultural Economics from the Oklahoma State University, Stillwater Oklahoma, USA. She also has an MBA from the Golden Gate University Graduate School of Business Administration, San Francisco, California USA in 1981. Thereafter she proceeded to study law at the University of Lagos from where she obtained a Bachelor of laws (LLB) in 1991 and a Masters of Law (LLM) in 2005. She was called to the Nigerian Bar in 1992. She is also an Accredited Mediator and Alternative Dispute Resolution (ADR) specializing in mediation/conciliation, Negotiation and Arbitration.
Between 1982 and 1993 she held various positions in different nancial institutions. She served as a Commissioner on the Board of Security and Exchange Commission (SEC), Abuja, between 2008 and 2012. She is currently engaged in consultancy and legal services. She is an entrepreneur and is a Franchise owner of Master Cobblers. Mrs. Fatade is also a director in Sterling Assurance Nigeria Ltd
Mr Adebayo Adetunji Adeleke is a non-executive director of the Company. He holds a B.A Hons in English Studies from the Obafemi Awolowo University, Ile Ife and an MBA from Delta State University Abraka. His professional background spans over 37 years in various industries such as African Petroleum (now Forte Oil Plc) and 5-Star Asset Management Limited, Lagos where he served as the pioneer Managing Director. He is currently the Managing Director/CEO of Lancelot Ventures Limited, a Real Estate Development company.Mr Adeleke belong to various professional/corporate and non-professional bodies including the Nigeria Institute of Management (NIM), the Chartered Institute of Stockbrokers and the Financial Reporting Council. Others are New Heartbeat Charity Foundation, Independent Shareholders Association of Nigeria (ISAN) and Jericho Business Club.He has signicant high level corporate experienced having served in several blue-chip companies as a Board, or Audit Committee member.He is currently a non-executive director of May & Baker Nigeria Plc, and serves in the Board Audit Committee of LaFarge Africa Plc, Honeywell Flour Mill Plc and Airline Services & Logistics Plc.
Mr Sulaiman Adedokun CFA is a non-executive Director of the CompanyHe started his career with Security Swaps Limited and later Nigerian Stockbrokers Limited (a subsidiary of NAL Bank Plc) from where he joined Meristem Securities Limited. He has functioned in several capacities ranging from Finance, Research, Stockbroking, Dealing and Investment Management. Sulaiman is a CFA chartered holder, a seasoned accountant and an astute investment banker with experience spanning across the various sectors of the capital market. He holds degrees both in Accounting and Banking and Finance and he is an associate member of the Institute of Chartered Accountants of Nigeria (ICAN), Chartered Institute of Taxation of Nigeria (CITN) and Chartered Institute of Stockbrokers (CIS). He is equally an authorised dealing clerk on the oor of the Nigerian Stock Exchange (NSE).
MS Daniella Suleman, a non-executive Director of the Company is a lawyer by profession. She holds a Bachelor of Laws degree from the University of Birmingham and was called to the Nigerian Bar in 1996. She has work experience in both the private and public sectors having worked in the Dangote Group as well as the Bureau of Public Enterprise for several years where she served at various strategic committees such as the Committee on the Privatisation of NITEL as well as that on the Concession of the Nigerian Ports.She is currently the Company Secretary of Flash Nigeria Limited.
The directors have pleasure in submitting their report and the audited nancial statements of the company for
the year ended 31st December, 2018.
1. Results
The results for the year are summarized as follows: 2018 2017
N'000 N'000
(Loss) before taxation (38,938) 5,553
Taxation (expense)/credit 12,505 (1,942)
(Loss)/prot after taxation (26,433) 3,611
======= ======
The audited nancial statements were prepared in accordance with the International Financial
Reporting Standards (IFRS) issued by the International Accounting Standards Board and the
requirements of the Companies and Allied Matters Act, CAP C20, LFN 2004.
2. Legal formth The company was incorporated as TNT SKYPAK NIGERIA LIMITED on 28 March, 1984 as a private limited
th liability company and on 6 September, 1992, the company's name was changed to Trans-Nationwide
Express Plc as a public limited liability company. The Company's shares are listed on the Nigerian Stock
Exchange.
3. Principal business activities
The company provides courier services, freight services, logistics, mail room management, haulage and e-
commerce from its headquarters in Lagos and thirty eight branches nationwide.
st4. Statement of directors' responsibilities in relation to the nancial statements for the year ended 31
December, 2018
The directors are responsible for the preparation of the nancial statements which give a true and fair view
of the state of affairs of the company at the end of the nancial year and of the prot or loss for the period
and which comply with the Companies and Allied Matters Act, CAP C20, LFN 2004.
The responsibilities include ensuring that:
I. Proper accounting records are maintained.
ii. Internal control procedures are instituted which as far as is reasonably possible safeguard the assets,
prevent and detect fraud and other irregularities.
iii. Applicable accounting standards are followed.
iv. Suitable accounting policies are adopted and consistently applied.v. Judgments and estimates made are reasonable and prudent, and;vi. The going concern basis is used unless it is inappropriate to presume that the company will continue in business.
5. Dividend The directors are not able to recommend the payment of dividend to shareholders for the nancial year
st ended 31 December, 2018.
6. Directors and their interests The names of the directors at the date of this report and of those who have held ofce during the year are as stated on page 1 of the nancial statements. In accordance with Article 82(2) of the company's articles of association, Ms. Daniella Suleman, Mr. Sulaiman Adedokun and Mr. Adebayo Adeleke, who were appointed directors after the last annual general meeting, offer themselves for election.
In accordance with Section 259 of the Companies and Allied Matters Act, CAP C20, LFN 2004 and in line with Article 81 of the Company's Articles of Association, one third of the directors shall retire from ofce.
Alhaji Umar B. Jimada, Mrs. Nneka Ikejiani and Mrs. Aderonke O. Fatade who are retiring by rotation at the forthcoming annual general meeting and being eligible, offer themselves for re-election.
The interest of each director in the shares of the company is as stated below:
7. Substantial shareholding The company's register of members shows that apart from the directors, the underlisted shareholders hold above 5% of the issued and fully paid share capital of the company.
Names No. of Shares % Holding MWML Nominees Ltd. 124,600,616 26.58 Saham Unitrust Insurance Nig. Ltd. 99,609,000 21.25 Adebayo Thomas Bandele (Otunba) 30,367,861 6.48
8. Donations There was no donation made during the year 2018 (2017- N125,600.00 ).
2018
HOLDING
2017HOLDING
Direct
Indirect
Percentage
Direct
Indirect
Percentage
Dr.
Oladiran
Fawibe
19,657,500
0
4.19
19,657,500
0
4.19
Mr.
Kayode
O.Ajakaiye
2,250,031
0
0.48
2,250,031
0
0.48
Mrs.
Chidinma
Iheme
4,026,750
0
0.86
4,026,750
0
0.86
Mrs.
Nneka
Ikejiani
(IndirectChiefE.Nwobi)
0
11,296,249
2.41
0
0
0.00
AlhajiUmarB.Jimada
(IndirectPlatformNig.Ltd.)
0
20,387,530
4.35
0
0
0.00
Mrs.
OluwatosinOgbemi
(IndirectOtunbaT.B.Adebayo) 250,000 30,367,861 0.05 250,000 0 0.05
Mrs. Aderonke O.Fatade 298,230 0 0.06 497,050 0 0.11
Mr.SulaimanA.Adedokun
(IndirectMWMLNomineesLtd) 0
124,600,616 26.58 0 0 0
Mr.AdebayoA.Adeleke
(IndirectSaham Unitrust) 304,000 99,609,000 0.06 0 0 0
Ms.DaniellaF.Suleman
(IndirectAirCdrDanSuleiman) 0
18,393,170 3.92 0 0 0
9. Director's interest in contracts For the purpose of Section 277 of the Companies and Allied Matters Act, CAP C20, LFN 2004, no director has notied the company of any declarable interest in contracts which the company is involved in during the year.
10. Record of directors' attendance In accordance with Section 258(2) of the Companies and Allied Matters Act, CAP C20, LFN 2004, the record of directors' attendance at board meetings during the year under review will be made available for inspection at the annual general meeting.
11. Employment and employees
(i) Employment of disabled persons: It is the policy of the company that there is no discrimination in considering applications for employment including those from physically challenged persons.
The policy ensures that as far as practicable, disabled persons have equal opportunities with able-bodied employees. There was no physically challenged person employed during the year.
(ii) Employees' involvement and training: The company is committed to keeping employees fully informed regarding its performance and progress. Opinions and suggestions of members of staff are sought and considered not only on matters affecting them as employees but also on the general business of the company.
Sound management and professional expertise are considered to be the company's major assets and investment in the future development of human resources continues to be a top priority. Each employee has a documented training and career development programme. To this end, short and long term training programmes are tailored to suit the requirements of both employees and the company. Employees are adequately rewarded and motivated to achieve results.
(iii) Health, safety and welfare of employees: The company accords high priority to the health, safety and welfare of its employees both in and outside their place of work. The company provides for medical, housing, transportation etc.
12 Property, Plant and Equipment Movements in xed assets during the year are shown in note 7 on page 29. In the opinion of the directors, the market value of the company's assets is not less than the value shown in the accounts.
13 Post balance sheet events There were no post balance sheet events which could have a material effect on the state of the company's
st affairs as at 31 December, 2018 and on the prot or loss account for the year ended on that date which had not been adequately provided for.
14. Securities trading The company has adopted a code of conduct with regard to securities transactions and the directors are aware of the restrictions imposed on them with regard to trading in the shares of the company during closed periods. The policy in place is obeyed by the directors and other senior employees who by virtue of their position constantly come in contact with price sensitive information.
Enquiries have been made and it is hereby stated that in respect of this nancial statements and the interim accounts submitted in the course of the year under review none of the directors violated the rules relating to securities trading.
15. Compliance with regulatory requirementsDuring the year, the company complied substantially with existing laws including the under listed laws/corporate governance guidelines and cooperated with regulatory agencies in the course of carrying out its activities:
- The Nigerian Stock Exchange post-listing rules. - The Securities and Exchange Commission's Code of Corporate Governance for Public Companies 2011. - Companies and Allied Matters Act, CAP C20, LFN 2004. - International Corporate Governance Best Practices.
16. Analysis of shareholding: The issued and fully paid-up share capital of the company is 468,847,132 ordinary shares of 50k each. The share capital is 100% owned by Nigerians. Range of shares No of holders % Units % 1-500 326 7.17 70,027 0.02 501-1,000 1,025 22.57 787,666 0.17 1,001-5,000 2,057 45.29 4,678,453 1.00 5,001-50,000 905 19.93 13,845,651 2.95 50,001-100,000 81 1.78 5,835,337 1.24 100,001-500,000 93 2.05 20,413,276 4.35 500,001-1,000,000 21 0.46 15,259,839 3.25 1,000,001-10,000,000 25 0.55 78,761,740 16.80 10,000,001-468,847,132 9 0.20 329,195,143 70.21 _______ _______ _______________ ________ 4,542 100 468,847,132 100 ===== ===== ========== ======
17. Share Capital History The authorized ordinary share capital currently stands at N250,000,000 divided into 500,000,000 ordinary shares of 50kobo each. The changes in the share capital of the company since incorporation are summarized below:
Year Authorised (N) Issued & fully paid-up Consideration Increase Cumulative Increase Cumulative 1984 0 500,000 0 500,000 Cash 1992 1,500,000 2,000,000 3,500,000 4,000,000 Cash 1996 14,000,000 16,000,000 12,000,000 16,000,000 Cash 1997 84,000,000 100,000,000 4,000,000 20,000,000 Bonus 1998 0 100,000,000 24,182,170 44,182,170 Cash 2006 150,000,000 250,000,000 22,091,085 66,273,255 Bonus 2010 0 250,000,000 33,136,628 99,409,881 Bonus 2017 0 250,000,000 135,013,685 234,423,566 Cash
18. Appointment and Re-election Process for the BoardŸ The Board ensures the appointment of new directors to replace exiting non-executive directors once
the need arises.Ÿ The Board always ascertains whether nominees for the position of directors are t and proper, carry
out detailed investigation on the proposed individuals and recommend to the relevant committee for review and nal approval by the Board.
Ÿ Board members must have an appropriate mix of skills and relevant experience required to make meaningful contribution at meetings.
Ÿ Periodic Board evaluation is carried out on the individual directors and the Board.Ÿ All directors are required to disclose their shareholding whether on a proprietary or duciary basis
prior to their appointment as well as Directorship in other companies (if any).Ÿ The non-executive Directors once appointed are subject to re-election by shareholders at the
company’s annual general meetings.
19. Corporate governance reportTrans-Nationwide Express Plc remains committed to achieving and maintaining best practices in corporate governance by ensuring accounting of specic individuals, through mechanisms that reduces or eliminates procedural breaches.
We recognize that high corporate governance standards are a sine qua non for effective management and control of business. The transparency, which these bring to bear on our operations, is essential for optimizing the value and interests of the various stakeholders of our company. It is also a major determinant of public and customer condence in any Institution and our goal is that Trans- Nationwide Express Plc shall be the industry barometer in the area of good corporate governance.
In furtherance of this commitment to high ethical conduct, we institutionalize a process of regularly reviewing our processes and practices to align them with the legislative and best practice changes in the global corporate governance environment.
Our efforts in this regard have been strengthened by key initiatives in the domestic regulatory environment. The launch in November, 2003 by the Securities and Exchange Commission (SEC) of the “Code of Corporate Governance” and subsequent reviews in 2008 and 2018 (The Code) provided a useful backdrop for evaluating our efforts thus far. We have taken additional decisions to enhance our corporate governance far in excess of the expectations of “The Code”.
In keeping with the broad picture and specic requirements of “The Code” the board has always taken its responsibilities for the cultural, ethical, legislative and institutional norms, which govern our operations very seriously. Consequently, the company's top-end is organized in such a way that directors are able to maintain a close watch on activities of the company. To facilitate and ensure process transparency, the board has set up 3 (three) board committees to assist its oversight of the affairs of the company in a lawful and efcient manner in such a way as to ensure that the company is constantly improving its value creation as much as possible.
The board and the various committees meet regularly, and there is full and frank dialogue between committee members and management on all major issues.
In addition, the board has in place a performance evaluation process to ensure that Directors' contribution to the goals and strategic objectives of the company are systematically measured based on pre-agreed and post evaluated criteria.
Trans-Nationwide Express Plc continues to maintain the board that has ultimate responsibility for the overall functioning of the company and hence, provides strategic direction for the company. Our board is stable, effective and independent. The nine-man board comprises a mix of one (1) executive, seven (7) non-executive directors, and one (1) independent director.
All directors are persons of high integrity, who are competent, knowledgeable and procient in their professional career, business and vocation. The professional background of the board members reects these ideals. The board, over the years, has exhibited signicant and diversity in terms of depth and breadth of experience, knowledge, attitude and skills.
Chairman and managing director:The positions, functions and responsibilities of the chairman and managing director continue to remain separate. While the chairman is responsible for leadership and overall board effectiveness, the managing director is responsible for the day to day management and administration of the company and its overall performance.
Board meetings:nd th th th
The board meetings were held on 22 March, 2018; 11 July, 2018; 27 September, 2018 and 12 December, 2018.
Meeting and attendance at board meeting during the year were as follows:
nd*Mrs. Chidinma Iheme retired from the service of the company with effect from 2 January,2019.** Mr. Sulaiman Adedokun, Mr. Adebayo Adeleke and Ms. Daniella Suleman were appointed with effect from
th11 July, 2018.
The board's functions are further dispensed through the three board committees indicated below, which work closely with management to achieve their objectives. Currently, the following are the standing committees of the company:
i) Finance, administrative and general purpose committee: The committee consists of four non-executive directors, while the managing director and the head of nance are in attendance. The committee is responsible for reviewing the details and making recommendation on nance and administration to the Board. The committee meets quarterly.
Name Designation Numberof
meetings
Held
Numberof
meetings
attended
Dr.OladiranFawibe Chairman 4 4
Mrs.ChidinmaE.Iheme* Executive 4 4
Mr.Kayode O.Ajakaiye Non-executive 4 4
AlhajiUmarB.Jimada Non-executive 4 4
Mrs.NnekaIkejiani Non-executive 4 4
Mrs.AderonkeFatade Independentdirector 4 4
Mrs.OluwatosinOgbemi Non-executive 4 4
Mr.SulaimanA.Adedokun** Non-executive 4 2
Mr.AdebayoA.Adeleke** Non-executive 4 2
Ms.DanielaF.Suleman** Non-executive 4 2
th th th thThe committee meetings were held on 9 March, 2018, 28 June, 2018,13 September,2018 and 29 November,2018. Membership and attendance at meetings during the period under review were as follows:
Name Designation Numberofmeetings
Attended
Mr.Kayode Ajakaiye Chairman 4 4
Mrs.NnekaIkejiani Member 4 4
Mrs.OluwatosinOgbemi Member 4 4
Mr.AdebayoA.Adeleke* Member 4 1
th* Mr. Adebayo Adeleke was appointed a Director of the Company with effect from 11 July, 2018.
ii) Business development committee: The committee is composed of two non-executive directors and one independent director, while the managing director and the head of commercial are in attendance. The committee has responsibility for reviewing the sales promotion and marketing strategies of the company. The committee meets quarterly.
th th th th nd The meetings were held on 28 February, 2018, 9 July,2018,16 August, 2018,25 September,2018,22 th November,2018 and 14 December, 2018.Membership and attendance at meetings during the period
under review were as follows:
AlhajiUmar.B.Jimada Chairman 6 6
Mrs.AderonkeO.Fatade Member 6 6
Ms.DaniellaF.Suleman* Member 6 1
iii) Risk management and governance committee:The committee is composed of two non-executive directors and one independent director, while the managing director, the nance manager/risk administrator, and the head of nance are in attendance. The committee has the responsibility of overseeing the company's risk prole, risk management framework and the risk reward strategy as determined by the board from time to time. The committee meets quarterly.
th th th th The meetings were held on14 February,2018, 7 June, 2018,18 September, 2018 and 8 November, 2018. Membership and attendance at meetings during the period under review were as follows:
Mrs.AderonkeO.Fatade Chairman 4 4
Mrs.OluwatosinOgbemi Member 4 4
Mr.SulaimanA.Adedokun* Member 4 1
th* Mr. Sulaiman A. Adedokun was appointed a Director of the Company with effect from 11 July, 2018.
NumberofmeetingsHeld
Name Designation NumberofmeetingsAttended
NumberofmeetingsHeld
Name Designation NumberofmeetingsAttended
NumberofmeetingsHeld
* Ms. Daniella Suleman was appointed a Director of the Company with effect from 11th July, 2018
iv) Audit committee: The audit committee is composed of two shareholders and two representatives of the board.
th th The audit committee meetings for 2018 were held in the following days: 12 March,2018, 12 June, 2018, th th 25 September, 2018, and 10 December, 2018.
Attendance at the audit committee meetings during the year 2018 were as follows:
Mrs.NnekaIkejiani Chairman 4 4
Mr.Kayode Ajakaiye Member 4 4
Mr.OluwaseunOlukoya Member 4 4
Mr.OlusegunOguntoye Member 4 4
Name Designation NumberofmeetingsAttended
NumberofmeetingsHeld
19. Conict of interest The board of directors and management ensure that they have sound knowledge of the memorandum and articles of association and any legislation that applies to the company about handling or avoiding conicts of interest.
Conict of interest can occur when an ofcial's duty to act in the best interest of the company conicts with the opportunity to derive a benet either directly or indirectly. If and when they arise these should be formally declared at Board meetings and managed responsibly.
20. Anti-corruption and money laundering policyIt is the policy of Trans-Nationwide Express Plc to conduct all its business transactions in an honest, open and transparent manner in accordance with our contractual and statutory obligations. The company has zero tolerance for any form of bribery, coercion and interference in the ofcial processes of the company and ofcial nancial matters.
21. Whistle Blowing Policy Trans-Nationwide Express Plc treats all disclosures resulting from whistle-blowing condentially. The identity of the whistle-blower shall be kept condential. Stakeholders are encouraged to disclose their name when ling reports to make their reports more credible. The company does not subject a whistle-blower to any detriment whatsoever on the grounds that he/she has made a disclosure in accordance with the provisions of these guidelines.
22. Auditors Messrs. HLB Z. O. Ososanya& Co.(Chartered Accountants) have indicated their willingness to continue in ofce as auditors of the company in accordance with the provision of Section 357 (2) of the Companies and Allied Matters Act, CAP C20, LFN 2004. A resolution will be proposed at the annual general meeting to authorize the directors to determine their remuneration.
BY ORDER OF THE BOARD
CAUTIOUS SERVICES LIMITED (COMPANY SECRETARIES) LAGOS, NIGERIA. FRC/2013/ICSAN/00000002873 March 21, 2019
In accordance with the provisions of Section 359(6) of the Companies and Allied Matters Act Cap C20 LFN 2004, st
we have examined the auditors' report for the year ended 31 December, 2018. We have obtained all the information and explanation we required.
In our opinion, the auditors' report is consistent with our review of the scope and planning of the audit. We are also satised that the accounting and reporting policies of the company are in accordance with legal requirements and agreed ethical practices. Having reviewed the auditors' ndings and recommendations on management matters, we are satised with the management responses thereon.
We acknowledge the cooperation of the auditors, Messrs. HLB Z. O. Ososanya& Co. (Chartered Accountants), management and staff of the company in performing our duties.
Other members of the audit committee are:
• Mr. Kayode Ajakaiye - Member
• Mr. Oluwaseun Olukoya - Member
• Mr.Olusegun Oguntoye - Member
Notes 2018 2017
N'000 N'000
Revenue 3 775,055 701,387
Direct costs 4 (328,677) (321,794)
------------- --------------
Gross prot 446,378 379,593
Other income 5 6,010 5,863
Administrative expenses 6 (491,326) (379,903)
(Loss)/prot before taxation (38,938) 5,553
Income tax (expense)/credit 18(i) 12,505 (1,942)
(Loss)/prot for the year (26,433) 3,611
======= ======
Per share data (kobo)
Earnings- Basic (5.6)k 0.8k
2018 2017 Notes N'000 N'000 ASSETS:Non-current assetsProperty, plant and equipment 7 295,833 166,581 ====== ======Current assetsInvestment 8 3,809 4,620 Inventories 9 12,756 6,722 Trade receivables 10 179,875 227,988 Other receivables 11 185,154 138,788 Cash and cash equivalents 12 43,223 214,642 Total current assets 424,817 592,760 ----------- ------------
Total assets 720,650 759,341 ======= ======= EQUITY AND LIABILITIESShare capital 13 234,424 234,424 Share premium 14 71,261 71,261Retained earnings 15 266,221 292,654 Total equity attributable to owners of the company 571,906 598,339 ======= ======= Non- current liabilitiesDeferred tax liabilities 16 366 13,013 ======= ======= CURRENT LIABILITIESTrade and other payables 17 122,065 117,038 Current tax liabilities 18(ii) 26,313 30,951 Total current liabilities 148,378 147,989 ======= ======
Total liabilities 148,744 161,002 ======= ======= Total equity and liabilities 720,650 759,341 ====== ======
The accompanying notes on pages 19 to 35 form an integral part of these Financial Statements.
2018 2017
Share Share Retained Share Share Retained
Capital Premium Earnings Total Capital Premium Earnings Total
N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000
stBalance at 1 January, 2018 234,424 71,261 292,654 598,339 99,410 - 327,977 427,387
Rights issue - - - - 135,014 81,008 - 216,022
Dividend paid - - - - - - (9,941) (9,941)
Rights issue expenses - - - - - (9,747) - (9,747)
Prior year Adjustment - - - - - - (28,993) (28,993)
(Loss)/prot for the year - - (26,433) (26,433) - - 3,611 3,611
stBalance at 31 December, 2018 234,424 71,261 266,221 571,906 234,424 71,261 292,654 598,339
====== ======== ======== ======== ======== ======= ======= =========
2018 2017
Notes N'000 N'000 N'000 N'000
Cash ows from operating activities:
Cash received from customers 777,681 690,678
Cash payments to suppliers and employees (776,345) (667,996)
Cash generated from operations 1,336 22,682
Taxation paid (4,780) (10,789)
Net cash from operating activities 20 (3,444) 11,893
Cash ows from investing activities
Purchase of property, plant and equipment (182,271) (6,515)
Proceeds from the sale of equipment 11,539 69
Interest received 2,474 2,775
Dividend received 283 263
Net cash outow from investing activities (167,975) (3,408)
Cash ows from nancing activities
Dividend paid - (9,941)
Proceeds of rights issue - 206,275
Net cash outow from nancing activities - 196,334
Net increase in cash & cash equivalents (171,419) 204,819
stCash and cash equivalents at 1 January 214,642 9,823
stCash and cash equivalents at 31 December 12 43,223 214,642 ======== =======
1. Statement of compliance with IFRSThe nancial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standard Board (IASB).
2. Accounting policies The principal accounting policies applied in the presentation of the nancial statements are set out below. a Basis of preparation These nancial statements have been prepared on historical cost basis. Historical cost is generally based on the fair value of the consideration given in exchange for assets and liabilities.
These nancial statements comprise a statement of nancial position, an income statement and a statement of other comprehensive income on a single format, a statement of changes in equity, a statement of cash ows and signicant notes to the nancial statements.
Other comprehensive income comprises items of income and expenses that are not recognized in the income statement, as required or permitted by IFRS. Transactions with owners of the company in their capacity as owners are recognized in the statement of changes in equity.
b Use of estimates and judgments The preparation of nancial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revision to any accounting estimate is recognized: i) in the period in which the estimate is revised, if the revision affects only that period. ii) In the period of the revision and future periods, if the revision affects both current and future periods. Judgments made by management in the application of IFRSs that have a signicant effect on the nancial statements and estimates with a signicant risk of material adjustment are discussed in the notes.
c. Functional currency and translation of foreign currencies Items included in these nancial statements are measured using the currency of the primary economic environment in which the company operates. The functional currency of the company is Naira. All nancial information presented in Naira has been rounded up to the nearest thousand unless otherwise stated.
Foreign currency transactions have been translated into the functional currency of the company using the exchange rate prevailing at the date of the transactions (spot exchange rate). Foreign exchange gain or loss arising from the settlement of such transactions and from translation at year end exchange rates of monetary assets and liabilities denomination in foreign currencies are recognized in statement of prot or loss.
d. Revenue recognitionRevenue represents the fair value of consideration received or receivable for sales of goods and services in the ordinary course of the company's activities and is stated net of Value Added Tax (VAT), rebates and discounts. The company recognizes revenue when it is probable that the economic benets will ow to the entity and the revenue can be reliably measured, regardless of when the payment is being made.
The company assesses its revenue arrangements against specic criteria in order to determine if it is acting as principal or agent. The company has concluded that it is acting as a principal in all of its revenue. The following specic recognition criteria must also be met before revenue is recognised:
Rendering of services Revenue from services rendered such as courier services, mail management services, freight services, logistics, ware housing and general haulage to customers is recognised as soon as the recipient of the services has signed off that such services has been rendered.
Interest income For all nancial instruments measured at amortised cost, interest income or expense is recorded using the effective interest rate (EIR), which is the rate that exactly discounts the estimated future cash payments or receipts through the expected life of the nancial instrument or a shorter period, where appropriate, to the net carrying amount of the nancial asset or liability. Interest income is included in the statement of comprehensive income.
DividendsRevenue is recognised when the company`s right to receive the payment of dividend is established, which is generally when shareholders approve the dividend.
IFRS 15 Revenue from contracts with customers IFRS 15 was issued in May 2014, and amended in April 2016, and establishes a ve-step model to account for revenue arising from contracts with customers. Under IFRS 15, revenue is recognised at an amount that reects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.
The new revenue standard will supersede all current revenue recognition requirements under IFRS. Either a full retrospective application or a modied retrospective application is required for annual periods beginning on or after 1 January 2018. Early adoption is permitted. Trans-Nationwide Express Plc plans to adopt the new standard on the required effective date using either of the methods which will be selected during the implementation phase.
Shortly before nalising the 2018 nancial statements, Trans-Nationwide Express Plc performed a detailed assessment of IFRS 15 and the outcome of this assessment is described below.
A. Rendering of services The company`s principal activities are provision courier services, freight services, logistics, warehousing and general haulage. These services are rendered to cash customers and credit customers
(I) Contract enforceability and termination clauses IFRS 15 explains that a contract does not exist if each party to the contract has the unilateral enforceable right to terminate a wholly unperformed contract without compensating the other party (or parties). Additionally, for implied contracts, Trans-Nationwide Express Plc may be required to account for contracts with stated terms as month to-month (or possibly a shorter duration) contracts if the parties can terminate the contract without penalty. Under the current standard, the assessment of termination clauses is not of paramount importance as revenue is recognised on a straight line basis. Thus, Trans-Nationwide Express Plc recognizes revenue when risk and reward pass to the buyer as services were rendered.
However, under IFRS 15 the period in which enforceable rights and obligations exist are affected by termination provisions stated in the contract. Trans-Nationwide Express Plc has evaluated that in certain contracts, it has the ability to enforce its rights and obligations throughout the stated term of the contracts or the term in which the substantial termination payment covers because substantive termination payments have commercial substance i.e. these payments can affect the nancial position or performance of Trans-Nationwide Express Plc if unperformed and signies a commitment by both parties to execute the contract.
Trans-Nationwide Express Plc equally has contracts with customers which contain termination clauses. These contract specically contains termination clauses relating to the effective date of the contract. However, after the effective date of the contract, both parties have enforceable rights and obligations only for the notice period of termination.
(ii)Distinct goods and servicesFor contracts with cash customers and credit customers, Trans-Nationwide express Plc delivers its promised service to customers as a separate performance obligation and they always recognize the transaction price as revenue when the shipments are pick-up/paid for from the customer and not until the shipments are delivered.
Under IFRS 15, a good or service that is promised to a customer is distinct if both of the following criteria are met: a) the customer can benet from the good or service either on its own or together with other resources that are readily available to the customer (i.e. the good or service is capable of being distinct); and b) the entity's promise to transfer the good or service to the customer is separately identiable from other promises in the contract (i.e. the good or service is distinct within the context of the contract).
Trans-Nationwide Express Plc currently does not assess its promises as distinct goods. Shipments to be delivered are applied to the rate to recognize revenue immediately they are picked. However, the timing of delivery and pick up is not materially affecting the timing of recognition of the revenue.
In line with IFRS 15, the services rendered are distinct service transferred at a point in time and revenue should be recognised when control passes to the customer.
(iii)Series of distinct goods and services
For contracts with cash customers and credit customers, Trans-Nationwide Express Plc delivers its promised service to customers throughout the term as agreed in the contract. Under IFRS 15, a series of distinct goods or services has the same pattern of transfer to the customer if both of the following criteria are met:
- Each distinct good or service in the series that the entity promises to transfer to the customer would meet the criteria in revenue recognition over time to be a performance obligation satised overtime; and -The same method would be used to measure the entity's progress towards complete satisfaction of the performance obligation to transfer each distinct good or service in the series to the customer.
Trans-Nationwide Express Plc currently does not assess its promises as series of services. Shipments to be delivered are applied to the rate to recognise revenue immediately the shipments are picked. However, under IFRS 15, Trans-Nationwide Express Plc will need to recognise its revenue over time with an appropriate measure of progress. This measure will be most likely be based on shipment delivered. By implication, the envisaged impact may be considerably low as Trans-Nationwide Express Plc currently recognizes revenue when risk and reward has been transferred. Using a measure of progress either input or output methods will most likely produce a result that is very similar to the current revenue recognition guidance. Trans-Nationwide Express Plc will need to develop clear accounting policy on series performance obligations.
(iv) Allocation of transaction price to performance obligations Under the current revenue standard, Trans-Nationwide Express Plc is not required to determine performance obligations and therefore does not allocate transaction price to performance obligations.
However, IFRS 15 states that the objective when allocating the transaction price is for an entity to allocate the transaction price to each performance obligation (or distinct good or service) in an amount that depicts the amount of consideration to which the entity expects to be entitled in exchange for transferring the promised goods or services to the customer. Determining the transaction price is an important step in applying IFRS 15 because this amount is allocated to the identied performance obligations and is recognised as revenue when (or as) those performance obligations are satised.
IFRS 15 also requires that once the separate performance obligations have been identied and the transaction price has been determined, an entity is expected to allocate the transaction price to the performance obligations in proportion to their stand-alone selling prices. IFRS 15 indicates that the observable price of a good or service sold separately provides the best evidence of stand-alone selling price. However, in many situations, stand-alone selling prices will not be readily observable. In those cases, an entity must estimate the stand-alone selling price.
For Trans-Nationwide Express`s contracts where they have one performance obligation, allocating the transaction price to the performance obligation will have no impact on the company.
Trans-Nationwide Express Plc has determined that if there arises a contract with multiple performance obligations, they will determine the standalone price for each performance obligation and allocate the transaction price to the performance obligations in proportion to the stand alone price. The company believes that this will impact the timing of revenue recognition.
Trans-Nationwide Express Plc is working towards developing a clear accounting policy initiative that will guide the determination of stand-alone prices.
(v) Revenue recognition over time Trans-Nationwide Express Plc currently recognizes revenue from credit customers with service level agreement based on the shipments taken daily/ multiplied by the price. However, IFRS 15.35 states that an entity transfers control of a good or service over time if one of the following criteria are met:
As the entity performs, the customer simultaneously receives and consumes the benets provided by the entity's performance. The entity's performance creates or enhances an asset (e.g., work in progress) that the customer controls as the asset is created or enhanced. The entity's performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date.
a. Advances received from customers Generally, Trans-Nationwide Express Plc receives an initial advance from customers upon entering into the contract in which the customer draws down from. Under the current accounting policy, the company presents such advances as deferred revenue under trade and other payables heading in the statement of nancial position. Under IFRS 15, Trans-Nationwide Express Plc must determine whether there is a signicant nancing component in its contracts. However, the company decided to use the practical expedient provided in IFRS 15, and will not adjust the promised amount of the consideration for the effects of a signicant nancing components in the contracts, where Trans-Nationwide Express expects, at contract inception, that the period between the transfer of a promised service to a customer and when the customer pays for that good or service will be one year or less. Therefore, for short-term advances, Trans-Nationwide Express Plc will not account for a nancing component even if it is signicant.
b. Presentation and disclosure requirements The presentation and disclosure requirements in IFRS 15 are more detailed than under current IFRS. The presentation requirements represent a signicant change from current practice and signicantly increases the volume of disclosures required in Trans-Nationwide Express Plc`s nancial statements. Many of the disclosure requirements in IFRS 15 are new and Trans-Nationwide Express Plc has assessed that the impact of some of these disclosures requirements will be signicant.
e Property, plant and equipmentAll categories of property, plant and equipment are initially recorded at cost. Buildings and freehold land are subsequently shown at fair value, based on periodic valuations by external independent valuers, less subsequent depreciation for buildings. Valuations are performed with sufcient regularity to ensure that the fair value of a revalued asset does not differ materially from its carrying amount.
Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset, and the net amount is restated to the revalued amount of the asset. All other property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Costs may also include transfers from equity of any gains or losses on qualifying cash ow hedges of foreign currency purchases of property, plant and equipment.
Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benets associated with the item will ow to the company and cost can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to the statement of prot or loss during the nancial period in which they are incurred.
Increases in the carrying amount arising on revaluation are credited to other comprehensive income and shown as other reserve in equity. Decreases that offset previous increases of the same assets are charged against the revaluation surplus; all other decreases are charged to prot or loss.
f. Investment properties. Investment properties are properties held for capital appreciation or to earn rentals or both. Investment properties are measured at fair value with all changes in fair value recognized in prot or loss. The fair value is determined at the reporting date by an independent valuator based on market evidence of the most recent prices achieved in arm's length transactions of similar properties in the same area.
g. Depreciation Depreciation on other assets is calculated using straight – line method to allocate their cost or revalued amounts to their residual values over the estimated useful lives, as follows:
• Buildings 2%
• Plant & machinery 12.5%
• Motor vehicles 25%
• Computer equipment 25%
• Furniture & ttings 12.5%
• Ofce equipment 12.5%
• Motorcycles 50%
The assets residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. This was hinged on the premise that motorcycles get worn-out faster than motor vehicle thereby necessitating the change. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized within 'gain or losses 'in other comprehensive income. When revalued assets are sold, the amounts included in revaluation reserves are transferred to retained earnings.
h. Intangible assets Computer software Acquired computer licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specic software. These costs are amortized on a straight line basis over their estimated useful lives (three to ve years). The amortization period is reviewed at each reporting date.
i. Financial instruments IFRS 9 Financial Instruments In July 2014, the IASB issued the nal version of IFRS 9 Financial instruments which reects all phases of the nancial instruments project and replaces IAS 39 Financial instruments: Recognition and measurement and all previous versions of IFRS 9. IFRS 9 brings together all three aspects of the accounting for nancial instruments project: classication and measurement, impairment and hedge accounting. IFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early application permitted. Except for hedge accounting, retrospective application is required but providing comparative information is not compulsory. For hedge accounting, the requirements are generally applied prospectively, with some limited exceptions.
Shortly before nalising the 2018 nancial statements, Trans-Nationwide Express Plc performed a detailed impact assessment of all three aspects of IFRS 9. This assessment is based on currently available information and may be subject to changes arising from further reasonable and supportable information being made available to Trans-Nationwide Express Plc in 2019 they will adopt IFRS 9.
Overall, Trans-Nationwide Express Plc expects no signicant impact on its statement of nancial position and equity except for the effect of applying the impairment requirements of IFRS 9 and as discussed below.
The company expects an increase in the loss allowance resulting in a negative impact on equity as discussed below. There will be no changes in the classication and measurement of nancial assets and nancial liabilities.
a. Classication and measurement Trans-Nationwide Express Plc does not expect a signicant impact on its statement of nancial position or equity on applying the classication and measurement requirements of IFRS 9.
Debt instruments classied as loans and receivables Under IAS 39, Trans-Nationwide express Plc has the following debt instruments which are classied under loans and receivables:
- Trade receivables - Other receivables
These debt instruments are held to collect contractual cash ows and are expected to give rise to cash ows representing solely payments of principal and interest. Trans-Nationwide Express Plc analyzed the contractual cash ow characteristics of those instruments and concluded that they do not meet the criteria for amortized cost measurement under IFRS 9. b. Impairment IFRS 9 requires Trans-Nationwide Express Plc to record expected credit losses on all of its debt instruments including trade receivables and bank balances and receivable from group companies either on a 12-month or lifetime basis. Trans-Nationwide Express Plc will apply the simplied approach and record a lifetime expected credit loss on all trade receivables that do not have signicant nancing component. For all other debt instruments other than trade receivables, Trans-Nationwide Express Plc will apply general approach under which nancial assets are classied into three stages i.e. stage 1, stage 2 or stage 3 depending on whether or not the credit risk of the nancial asset has increased signicantly.
c. Equity instruments All equity investments in scope of IFRS 9 are to be measured at fair value in the statement of nancial position, with value changes recognised in prot or loss, except for those equity investments for which the entity has elected to present value changes in 'other comprehensive income'. There is no 'cost exception' for unquoted equities. If an equity investment is not held for trading, an entity can make an irrevocable election at initial recognition to measure it at FVTOCI with only dividend income recognised in prot or loss. [IFRS 9, paragraph 5.7.5]
Trans-Nationwide Express Plc measures all its equity instruments at fair value in the statement of nancial position.
Despite the fair value requirement for all equity investments, IFRS 9 contains guidance on when cost may be the best estimate of fair value and also when it might not be representative of fair value.
d. Hedge accounting Although IFRS 9 does not change the general principles of how an entity accounts for effective hedges, Trans-Nationwide Express Plc does not engage in any nancial or economic hedge. As such, this aspect of IFRS 9 will not have impact on Trans-Nationwide Express Plc..
j. Leases Where the company acquires items of properties, plant and equipment on a nance lease,the interest on lease is recognized as an expense under nance cost and charged to statement of comprehensive income.
k. Inventories Inventories are stated at the lower of cost and net realizable value. Cost is determined by the weighted average method. Net realizable value is the estimate of the selling price in the ordinary course of business, less cost of completion and selling expenses.
l. Receivables Receivables are recognized initially at fair value and subsequently measured at amortized cost using effective interest method less provision for impairment. A provision for impairment of receivables is established when there is objective evidence that the company will not be able to collect the entire amount due according to the original terms of receivables. Signicant nancial difculties of the debtors, probability that debtor will enter bankruptcy and default or delay payment (more than 30 days overdue), are the indicators that trade receivable is impaired. The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognized in the prot or loss within administrative cost. When trade receivable is uncollectible, it is written against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against administrative costs in the prot or loss.
The amount of the provision is the difference between the carrying amount and the present value of the future estimate cash ows, discounted at the original effective discount rate.
m. Cash and cash equivalents Cash and cash equivalents includes cash in hand, deposit held at call with banks, other short term highly liquid investments with original maturity of three months or less, and bank overdrafts.
n. Employee benets Retirement benet obligations The company operates a retirement benets scheme for its employees in accordance with the provision of the Pension Reforms Act of 2004. The Scheme is funded through monthly contribution of 7.5% by both the company and the employees respectively. These contributions are recognized in the statement of comprehensive income.
o. Provisions A provision is recognized only if, as a result of past event, the company has a present legal or constructive obligation that can be reliably estimated, and it is probable that a transfer of economic benets will be required to settle the obligation. Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at reporting date.
p. Current and deferred income tax Income tax expense is the aggregate of the charge to prot or loss in respect of current and deferred income tax. Current income tax is the amount of income tax payable of taxable prot for the year determined in accordance with the relevant tax legislation. Education tax is provided at 2% of assessable prots of companies operating within Nigeria. Deferred Income tax is provided in full, using liability method, on all temporary differences arising between the tax bases of assets and liabilities and their carrying values for nancial reporting purposes. Current and deferred income tax is determined using tax rates and laws enacted or substantively enacted at the reporting date and are expected to apply when the related deferred income tax liability is settled. Deferred income tax assets are recognized only to the extent that it is probable that future taxable prots will be available against which the temporary differences can be utilized.
q. Borrowings Borrowings are classied as current liabilities unless the company has an unconditional right to defer settlement of the liability for 12 months after the reporting date. Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost using the effective interest method; any differences between proceeds (net of transaction costs) and the redemption value is recognized in the prot or loss over the period of the borrowings, using the effective interest rate method.
Borrowing costs Borrowing cost are recognized as expense in the period in which they are incurred, except when they are directly attributable to the acquisition, construction or production of qualifying asset, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
r. Dividend Dividends payable to the company's shareholders are recognized as a liability in the period in which they are declared and approved by the shareholders.
2018 2017 N'000 N'000
3. Revenue Courier services 539,814 535,895 Logistics income 35,084 16,257 Internal mailing income 40,818 37,678 Mail bag income 39,114 39,473 Mass mailing income 60,422 14,588 Freight income 50,220 46,457 Warehousing income 9,583 11,039 775,055 701,387 ======= =======4. Direct costs Direct operating expenses 182,458 199,476 Logistic expense 16,623 9,548 Internal mailing expense 27,521 26,855 Mass mailing expense 33,875 8,408 Mail bag expense 24,527 24,154 Freight expense 24,980 22,409 Warehousing expense 2,012 3,752 Direct delivery cost 16,681 27,192 328,677 321,794 ======== =======5. Other income
Provision no longer required 385 292 Gain on investment valuation (nancial assets) - 2,135 Interest on short term deposit 2,474 2,775 Dividend income 283 263 Exchange rate gain 2,374 314 Sale of scrap - 15 Sundry income 160 - Prot on assets disposal 334 69 6,010 5,863 ====== =====
6. Administrative expensesPersonnel cost 217,714 199,635 Administrative cost 231,798 152,466 Depreciation 41,814 27,802 491,326 379,903
======= =======
7. Property, Plant and Equipment Details of the company's property, plant and equipment and their carrying amounts are:
Land Building Motor Ofce Furniture Motor Plant & Computer Total vehicles equipment & Fittings Cycles machinery Equipment N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000
COST At 01/01/2018 55,000 92,876 172,342 13,548 10,383 24,192 6,107 24,172 398,620 Additions - 4,965 167,126 1,109 591 5,851 1,022 1,607 182,271 Disposals - - (27,013) - - - - (268) (27,281) At 31/12/2018 55,000 97,841 312,455 14,657 10,974 30,043 7,129 25,511 553,610 ======= ====== ======= ======= ======= ====== ====== ====== ======
DEPRECIATION At 01/01/2018 - 6,125 158,679 10,052 8,937 23,251 3,694 21,301 232,039 Charge for the year - 1,899 34,224 721 435 1,879 829 1,827 41,814
Disposals - - (15,841) - - - - (235) (16,076) At 31/12/2018 - 8,024 177,062 10,773 9,372 25,130 4,523 22,893 257,777 ======= ===== ======= ====== ===== ===== ===== ====== =======
CARRYING AMOUNTS At 31/12/2018 55,000 89,817 135,393 3,884 1,602 4,913 2,606 2,618 295,833 ====== ====== ====== ====== ===== ===== ===== ====== =======
Land Building Motor Ofce Furniture Motor Plant & Computer Total Vehicles equipment & Fittings Cycles machinery Equipment N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000
COST At 01/01/2017 55,000 92,876 169,570 12,038 10,154 23,180 6,107 23,379 392,304 Additions - - 2,772 1,510 229 1,211 - 793 6,515 Disposals - - - - - (199) - - (199) At 31/12/2017 55,000 92,876 172,342 13,548 10,383 24,192 6,107 24,172 398,620 ======= ======= ====== ======= ======= ====== ====== ====== =======
DEPRECIATION At 01/01/2017 - 4,268 140,653 9,446 8,449 19,239 2,958 19,423 204,436 Charge for the year - 1,857 18,026 606 488 4,211 736 1,878 27,802
Disposals - - - - - ( 199) - - (199) At 31/12/2017 - 6,125 158,679 10,052 8,937 23,251 3,694 21,301 232,039 ======= ===== ======= ====== ===== ===== ===== ====== =======
CARRYING AMOUNTS At 31/12/2017 55,000 86,751 13,663 3,496 1,446 941 2,413 2,871 166,581 ====== ====== ====== ====== ===== ===== ===== ====== =======
2018 2017
N'000 N'000
8. Investment in equity shares
12,801units of Stanbic IBTC shares 614 531
80,356 units of Zenith Bank Plc shares 1,852 2,060
185,952 units of Access Bank Plc shares 1,264 1,943
30,000 units Fidelity Bank Plc shares 61 74
23,625units of Skye Bank Plc shares 18 12
3,809 4,620
===== =====
9. Inventories
Courier iers 3,530 2,457
Courier seals 549 420
Airway bills 8,677 3,845
12,756 6,722
===== =====
Inventories are measured at the lower of, cost and net realizable value. The inventories are not
pledged as securities for liabilities.
10. Trade receivables
Head ofce
1 - 3 months 64,861 71,808
4 - 6 months 31,741 38,387
7 - 12 months 21,853 9,082
Above 1 year 48,064 45,418
Branches 1 - 3 months 15,633 18,810 4 - 6 months 20,755 20,055 7 - 12 months 5,417 4,600 Above 1 year 22,314 24,155 230,638 232,315 Allowance for credit losses (50,763) (4,327) 179,875 227,988 ======= ====== The carrying value of trade receivables is considered a reasonable fair value and has been stated at amortized cost.
11a. Other receivables Staff debtors - 445 Other receivables 36,520 8,149 Prepayments 16,997 15,237 Withholding tax (11b) 131,637 114,957 185,154 138,788 ======= =======
11b. Witholding tax receivable st At 1 January 114,957 87,703
Addition in the year 19,720 36,780
Tax offset (3,040) (9,526)
131,637 114,957
====== =======
12. Cash and cash equivalents Cash balances 1,048 93 Bank balances 42,175 214,549 43,223 214,642 ====== =======
13. Share capital Authorised: 500,000,000 ordinary shares 50k each 250,000 250,000 ======= ======= Issued and fully paid: Ordinary shares:
At start of the period 234,424 99,410 Rights issue - 135,014 234,424 234,424 ======= =======
14. Share premium At start of the period 71,261 - Rights issue - 81,008 Rights issue expenses - (9,747) 71,261 71,261 ======= =======
2018 2017
N'000 N'00015. Retained earnings
st Balance at 1 January 292,654 327,977
Prior year adjustment - (28,993)
Dividend paid - (9,941) (Loss)/prot for the year (26,433) 3,611
266,221 292,654 ======= =======
16. Deferred taxst Balance as at 1 January 13,013 14,797
Decrease for the year (12,647) (1,784)st Balance at 31 December 366 13,013
====== ======
17. Trade and other payables
Trade creditors 20,210 9,957
Other creditors 101,855 107,081
122,065 117,038
======= ======
18. Taxation
(i) Statement of prot or loss:
Income tax 118 3,105
Tertiary education tax 24 621
Deferred tax release (12,647) (1,784)
(12,505) 1,942
====== ======
(ii) Statement of nancial position: st Balance at 1 January 30,951 21,120
Charge for the year 142 3,726
Tax audit additional provision - 16,894
Payment during the year (4,780) (10,789)
26,313 30,951
====== =======
The charge for income tax in these nancial statements is based on the provisions of the Companies Income Tax Act, CAP C20, LFN 2004 (as amended) and the Tertiary Education Tax Act, CAP E4 LFN 2004.
39
2018 2017
N'000 N'00019. Dividend Prior year dividend declared - 9,941 Payments during the year - (9,941)
- - ====== ======
20. Cash ows from operating activities 2018 2017 N'000 N'000 (Loss)/prot before tax (38,938) 5,553 Adjustment to reconcile loss before tax to net cash ows: Depreciation of property, plant equipment 41,814 27,802 (Prot)/loss on disposal of plant and equipment (334) (69) Unrealized (gain)/loss on investment valuation 811 (2,135) Additional tax for earlier year - 16,894 Prior year adjustment - (28,993) Interest received (2,474) (2,775) Dividend received (283) (263) Operating prot before working capital changes 596 16,014 ======= ======= Working capital changes
(Increase)/decrease in inventories (6,034) 380 Decrease in trade and other receivables 1,747 (13,534) Increase in trade and other payables 5,027 19,822 Net changes in working capital 740 6,668 ----------- - ------------
Tax paid (4,780) (10,789) ………..….. …………… Cash generated from operation (3,444) 11,893 ======= =======
21. Loss before tax Loss before taxation is stated after charging: Director fee 5,400 3,625 Auditors remuneration 2,000 2,000 Depreciation 41,814 27,802 ====== ======
40
22. Information regarding directors and employees i) Average number of employees in the nancial year under review were as follows:
2018 2017 Management staff 7 6 Senior staff 10 8 Supervisors 37 30 Junior staff 94 85 148 129 === ===
ii) The number of employees with gross earnings within the following ranges were:
N N 350,001 - 450,000 90 80 450,001 - 550,000 45 35 550,001 - 650,000 6 7 650,001 - 950,000 1 1 950,001 - Above 6 6 148 129 === ===
iii) Directors' emoluments: Chairman 540 540 Directors 4,860 3,085 5,400 3,625 ===== =====
23. COMMITMENTS AND CONTINGENT LIABILITIES
i) Financial Commitments
The company did not charge any of its assets to secure liabilities of third parties. The directors are of
the opinion that all known liabilities and commitments have been taken into account in the preparation
of these nancial statements.
These liabilities are relevant in assessing the company's state of affairs.
ii) Contingent liabilities There are contingent liabilities in respect of legal actions against the company. Management has not made provision for these contingent liabilities as consultation with the company's external solicitors have indicated that the likely outcome of the legal action will favour the company.
41
stYear ended 31 December 2018 2017
N'000 % N'000 %
Turnover 775,055 701,387
Other income 6,010 5,863
781,065 707,250
Bought-in materials & services (560,475) ______ (474,260) ______Value added 220,590 100 232,990 100
======== ===== ======== =====
APPLIED AS FOLLOWS:
In payment to employees:
Wages, salaries and other benets 217,714 98.70 199,635 85.68
In payment to providers of funds:
Finance cost - - - -
In payment to government:
Income tax 118 0.05 3,105 1.33
Education tax 24 0.01 621 0.27
Retained for future replacement of
assets and expansion of business:
Deferred tax (12,647) (5.73) (1,784) (0.77)Depreciation 41,814 18.96 27,802 11.94 Prot or loss account (26,433) (11.99) 3,611 1.55 220,590 100.0 232,990 100.0
======= ===== ======= =====
Value added represents the additional wealth which the company has been able to create by its own and its employees' efforts. The statement shows the allocation of that wealth among the employees, providers of funds, government as well as what had been retained for the future creation of more wealth in the future.
stYear ended 31 December IFRS IFRS IFRS IFRS IFRS
2018 2017 2016 2015 2014
N'000 N'000 N'000 N'000 N'000
ASSETS EMPLOYED
Property, plant &equipment 295,833 166,581 187,868 199,464 208,352
Investment 3,809 4,620 7,486 2,325 1,938
Inventories 12,756 6,722 7,102 6,853 9,372
Trade receivables 179,875 227,988 248,263 274,970 237,809
Other receivables 185,154 138,788 104,978 160,856 148,637
Cash & cash equivalents 43,223 214,642 13,886 11,799 21,353
720,650 759,341 569,583 656,267 627,461
======== ======= ======== ======== ========
EQUITY AND LIABILITIES
Share capital 234,424 234,424 99,410 99,410 99,410
Share premium 71,261 71,261 - - -
Retained earnings 266,221 292,654 327,977 328,675 298,089
Deferred tax liabilities 366 13,013 14,797 15,396 14,425
Bank overdraft - - 4,063 5,914 18,066
Trade& other liabilities 122,065 117,038 102,216 109,412 110,384
Tax liabilities 26,313 30,951 21,120 97,460 87,087
720,650 759,341 569,583 656,267 627,461
======= ======= ======= ======= =======
TURNOVER & PROFIT
Revenue 775,055 701,387 803,724 798,557 718,016
(Loss)/prot before taxation (38,938) 5,553 30,292 75,678 49,476
Taxation(Def./ tax release/charge incl) 12,505 (1,942) (10,106) (24,706) 17,295
(Loss)/prot after taxation (26,433) 3,611 20,186 50,972 66,771
======= ======= ======= ======= ========
PER 50K SHARE DATA (KOBO)
Earnings per share (5.6) 0.8 10 26 34 Dividend per share - - 5 10 10
42
43
11th July 2019
2019
Thursday 11th July, 2019.
2a. To elect Directors: Ms. Daniella Suleman Mr. Sulaiman Adedokun Mr. Adebayo Adeleke
1. To receive Reports & Accounts
2b. To re-elect Directors: Alhaji Umar B. Jimada Mrs. Nneka Ikejiani Mrs. Aderonke O. Fatade
3. To authorise the Directors to fix the remuneration of the Auditors
4. To elect members of the Audit Committee
5. To fix the remuneration of the Directors
